Zymeworks (ZYME) risk factors, FY2024 10-K

Risks Related to Our Business and the Development and Commercialization of Our Product Candidates

1. 01We have a limited number of product candidates, which are still in preclinical or clinical development. If we do not obtain regulatory approval of our product candidates, or experience significant delays in doing so, our business will be materially adversely affected
2. 02If clinical trials for product candidates are prolonged, delayed or stopped, we may be unable to obtain regulatory approval and commercialize product candidates on a timely basis, or at all, which could require us to incur additional costs and delay our receipt of any product revenue
3. 03Our long-term prospects depend in part upon discovering, developing and commercializing additional product candidates, which may fail in development or suffer delays that adversely affect their commercial viability
4. 04If we, or any of our strategic partners, are unable to enroll patients in clinical trials, we will be unable to complete these trials on a timely basis or at all
5. 05The design or our execution of clinical trials may not support regulatory approval
6. 06Interim, preliminary or top-line data from our clinical trials that we announce or publish from time to time may change as more patient data become available and are subject to audit and verification procedures that could result in material changes in the final data
7. 07The Fast Track and Breakthrough Therapy designations received for zanidatamab may not result in faster development, regulatory review or approval process
8. 08Development of product candidates in combination with other therapies could expose us to additional risks
9. 09If we are unable to successfully develop any required companion diagnostic tests for our product candidates, or experience significant delays in doing so, or rely on third parties in the development of such companion diagnostic tests, we may not realize the full commercial potential of our product candidates
10. 10trials, the development of our product candidates may be adversely affected or we may not obtain marketing approval, and we may not realize the full commercial potential of our product candidates
11. 11Successful development of our current and future product candidates is uncertain and we may discontinue or reprioritize the development of any of our product candidates at any time, at our discretion
12. 12Our product candidates may have undesirable side effects that may delay or prevent marketing approval or, if approval is received, require them to be taken off the market, require them to include safety warnings or otherwise limit their sales
13. 13We face significant competition, and if our competitors develop and market products that are more effective, safer and/or less expensive than our product candidates, our commercial opportunities will be negatively impacted
14. 14We expect to compete with biosimilar versions of already approved products, and even if additional product candidates achieve marketing approval, they may be challenged to achieve a price premium over competitive biosimilar products and will compete for market share with them
15. 15If zanidatamab or any of our product candidates that receives regulatory approval in the future does not achieve broad market acceptance among physicians, patients, the medical community and third-party payors, revenue generated from royalties or sales would be limited
16. 16Even if we obtain FDA approval of any of our product candidates, we may never obtain approval or commercialize such product candidates outside of the United States, which would limit our ability to realize their full market potential
17. 17Reimbursement decisions by third-party payors may have an adverse effect on pricing and market acceptance. If there is not sufficient reimbursement for our products, it is less likely that our products will be widely used
18. 18We may not be successful in our efforts to use our therapeutic platforms to build a pipeline of product candidates
19. 19Even if we receive regulatory approval to commercialize any of the product candidates that we develop, we will be subject to ongoing regulatory obligations and continued regulatory review, which may result in significant additional expense
20. 20If any product liability lawsuits are successfully brought against us or any of our strategic partners, we may incur substantial liabilities and commercialization efforts of zanidatamab or our product candidates may need to be limited
21. 21If we, our strategic partners or any of our third-party manufacturers encounter manufacturing difficulties, our ability to provide supply of our product candidates for clinical trials or any approved products for patients could be delayed or prevented
22. 22Strategic transactions could disrupt our business, cause dilution to our stockholders and otherwise harm our business
23. 23Security breaches and incidents, loss of data and other disruptions could compromise sensitive information related to our business or protected health information or prevent us from accessing critical information and expose us to liability, which could adversely affect our business and our reputation
24. 24Current and future legislation may increase the difficulty and cost for us or our strategic partners to commercialize any approved products that we or our strategic partners develop and affect the prices that may be obtained
25. 25Our business may become subject to economic, political, regulatory and other risks associated with international operations
26. 26Our business has been in the past and may in the future be adversely affected by public health outbreaks and pandemics
27. 27Healthcare providers, physicians and third-party payors in the United States and elsewhere play a primary role in the recommendation and prescription of zanidatamab and any product candidates for which we obtain marketing approval
28. 28Because of the breadth of these laws and the narrowness of any available statutory exceptions and safe harbors, it is possible that some of our current and future business activities could be subject to challenge under one or more of such laws

Risks Related to Our Financial Position and Need for Additional Capital

1. 29Biopharmaceutical product development is a highly speculative undertaking and involves a substantial degree of uncertainty. We have never received any revenue from product sales and may never be profitable
2. 30We will require substantial additional funding, which may not be available to us on acceptable terms, or at all, and, if not available, may require us to delay, scale back, or cease our product development programs or operations
3. 31Raising additional capital may cause dilution to our stockholders, restrict our operations or require us to relinquish substantial rights
4. 32Our effective tax rate may change in the future

Risks Related to Our Dependence on Third Parties

1. 33We depend on our collaborative relationship with Jazz to further develop and commercialize zanidatamab, and if our relationship is not successful or is terminated, we may be delayed in or unable to effectively develop and/or commercialize zanidatamab, which could have a material adverse effect on our business
2. 34Our existing strategic partnerships are important to our business, and future strategic partnerships will likely also be important to us. If we are unable to maintain our strategic partnerships, or if these strategic partnerships are not successful, our business could be adversely affected
3. 35We face significant competition in seeking new strategic partners
4. 36Ultimately, we are responsible for ensuring that each of our clinical trials is conducted in accordance with the applicable protocol, legal, regulatory and scientific standards, and our reliance on third parties does not relieve us of our regulatory responsibilities

Risks Related to Our Intellectual Property

1. 37Our commercial success depends significantly on our ability to operate without infringing the patents and other proprietary rights of third parties
2. 38If we are unable to obtain, maintain and enforce patent and trade secret protection for our product candidates and related technology, our business could be materially harmed
3. 39Our patents covering one or more of our products or product candidates could be found invalid or unenforceable if challenged
4. 40Our intellectual property rights will not necessarily provide us with competitive advantages
5. 41We may become involved in lawsuits to protect or enforce our patents and trade secrets, which could be expensive, time consuming and unsuccessful
6. 42Patent terms may be inadequate to protect our competitive position on our product candidates for an adequate amount of time
7. 43If we do not obtain protection under the Hatch-Waxman Amendments and similar legislation in other countries for extending the term of patents covering each of our product candidates, our business may be materially harmed
8. 44If we are unable to protect the confidentiality of our proprietary information, the value of our technology and products could be adversely affected
9. 45Obtaining and maintaining our patent protection depends on compliance with various procedural, documentary, fee payment and other requirements imposed by regulations and governmental patent agencies, and our patent protection could be reduced or eliminated for noncompliance with these requirements
10. 46We may be subject to claims challenging the inventorship of our patents and other intellectual property
11. 47Patent protection and patent prosecution for some of our product candidates may be dependent on, and the ability to assert patents and defend them against claims of invalidity may be maintained by, third parties
12. 48Changes in patent laws or patent jurisprudence could diminish the value of patents in general, thereby impairing our ability to protect our products
13. 49We may not be able to protect our intellectual property rights throughout the world
14. 50We use open source software in connection with our internal research and development programs, which could negatively affect our ability to develop products and subject us to litigation or other actions
15. 51source software, or if the license terms for open source software that we use change, we may be required to re-engineer our platform, incur additional costs, discontinue the use of some or all of our platform or take other remedial actions
16. 52We will need to obtain FDA approval for any proposed product candidate names, and any failure or delay associated with such approval may adversely affect our business

Risks Related to Additional Legal and Compliance Matters

1. 53Our employees may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements, insider trading, and noncompliance with our policies and procedures
2. 54If we or our contractors or agents market products in a manner that violates healthcare fraud and abuse laws, or if we violate government price reporting laws and transparency laws, we may be subject to civil or criminal penalties
3. 55If we do not comply with laws regulating the protection of the environment and health and human safety, our business could be adversely affected
4. 56We may be subject to certain costs and inefficiencies as a result of our 2022 Redomicile Transactions

Risks Related to Employee Matters and Managing Growth

1. 57Our future success depends on our ability to retain key executives and to attract, retain and motivate qualified personnel
2. 58As we advance our development and commercialization plans and strategies, we may need to grow or modify our organization, and we may experience difficulty in managing such change, which could disrupt our operations

Risks Related to Our Common Stock

1. 59Our stock price is likely to be volatile and the market price of our common stock may drop below the price paid by stockholders
2. 60An active trading market for our common stock may not be sustained
3. 61Our management team has broad discretion to use the net proceeds from our financing activities as well as funds received pursuant to our strategic collaborations, and its investment of these proceeds may not yield a favorable return. They may invest the proceeds in ways with which our stockholders disagree
4. 62We do not anticipate paying cash dividends for the foreseeable future, and accordingly, stockholders must rely on stock appreciation for any return on their investment
5. 63Our principal stockholders, in aggregate, could exert substantial influence over us which could delay or prevent a change in corporate control or result in the entrenchment of management or the board of directors
6. 64We qualify as a “smaller reporting company,” as defined under the Exchange Act, and, for as long as we continue to be a smaller reporting company, we may choose to take advantage of exemptions from various reporting requirements applicable to other public companies that are not smaller reporting companies
7. 65level at which our internal controls are documented, designed, implemented or reviewed. Undetected material weaknesses in our internal controls could lead to financial statement restatements and require us to incur the expense of remediation
8. 66Holders of our Exchangeable Shares are subject to additional risks
9. 67Delaware law and provisions in our amended and restated certificate of incorporation and amended and restated bylaws might delay, discourage or prevent a change in control of Zymeworks or changes in our management, thereby depressing the market price of our common stock
10. 68There can be no assurance that we will repurchase additional shares of our common stock or that we will repurchase shares at favorable prices